UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

(Mark One)
[X]  Quarterly report under Section 13 or 15(d) of the Securities
     Exchange Act of 1934
                  For the quarterly period ended    June 30, 2001

[ ]  Transition report under Section 13 or 15(d) of the Securities
     Exchange Act of 1934

                  For the transition period from _____ to _____

                        Commission file number       000-26095


                              ENVIROKARE TECH, INC.
        (Exact name of small business issuer as specified in its charter)


                Nevada                                      88-0412549
       (State or other jurisdiction                      (I.R.S. Employer
     of incorporation or organization)                  Identification No.)


             2470 Chandler Avenue, Suite 5, Las Vegas, Nevada 89120
                    (Address of principal executive offices)


                                 (702) 262-1999
                           (Issuer's telephone number)


                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the issuer filed all documents and reports required to be filed by
Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities
under a plan confirmed by a court.
Yes [ ]     No [ ]
                                 NOT APPLICABLE

                      APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: The total number of shares of Common
Stock, par value $.001 per share, outstanding as of July 17, 2001, was
14,889,478.

Transitional Small Business Disclosure Format (Check one):  Yes [ ]   No [X]

<PAGE>


                                TABLE OF CONTENTS

Part I -- FINANCIAL INFORMATION

Item 1.    Financial Statements...............................................1

                Accountant's Review Report....................................2

                Consolidated Balance Sheets...................................3

                Consolidated Statements of Operations and
                  Comprehensive Loss..........................................4

                Consolidated Statement of Stockholders' Equity................5

                Consolidated Statements of Cash Flows.........................6


           Notes to the Consolidated Financial Statements.....................7


Item 2.    Plan of Operation.................................................20


Part II -- OTHER INFORMATION

Item 1.    Legal Proceedings.................................................29

Item 2.    Changes in Securities.............................................29

Item 3.    Defaults Upon Senior Securities...................................29

Item 4.    Submission of Matters to a Vote of Security Holders...............30

Item 5     Other Information.................................................30

Item 6.    Exhibits and Reports on Form 8-K..................................30


<PAGE>


                         PART I - FINANCIAL INFORMATION


Item 1.    Financial Statements





                              ENVIROKARE TECH, INC.
                              Financial Statements
                                  June 30, 2001













                              WILLIAMS & WEBSTER PS

                          Certified Public Accountants
                        Bank of America Financial Center
                           W 601 Riverside, Suite 1940
                                Spokane, WA 99201
                                 (509) 838-5111



                                       1
<PAGE>


Board of Directors
Envirokare Tech, Inc.
2470 Chandler, Suite 5
Las Vegas, Nevada  89120


                           ACCOUNTANT'S REVIEW REPORT

We have reviewed the accompanying consolidated balance sheets of Envirokare
Tech, Inc. (a development stage company) as of June 30, 2001 and the related
consolidated statements of operations and comprehensive loss, cash flows, and
stockholders' equity for the three months and six months ended June 30, 2001,
and 2000, and for the period from June 15, 1998 (inception) through June 30,
2001. These financial statements are the responsibility of the Company's
management.

We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit in accordance with
auditing standards generally accepted in the United States of America, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should
be made to the accompanying financial statements in order for them to be in
conformity with accounting principles generally accepted in the United States of
America.

The financial statements for the year ended December 31, 2000 were audited by us
and we expressed an unqualified opinion on them in our report dated March 30,
2001, but we have not performed any auditing procedures since that date.

As discussed in Note 2, the Company has been in the development stage since its
inception and has no revenues. The Company's continued viability is dependent
upon the Company's ability to meet its future financing requirements and the
success of future operations. These factors raise substantial doubt about the
Company's ability to continue as a going concern. Management's plans regarding
those matters are described in Note 2. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.


Williams & Webster, P.S.
Certified Public Accountants
Spokane, Washington
July 20, 2001

                                       2

<PAGE>

                              ENVIROKARE TECH, INC.
                          (A Development Stage Company)
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                  June 30,
                                                                                    2001           December 31,
                                                                                 (unaudited)           2000
                                                                                 -----------       -----------
ASSETS
<S>                                                                              <C>               <C>
        CURRENT ASSETS
            Cash                                                                 $   107,531       $    11,362
            Due from related party                                                     6,648             6,438
                                                                                 -----------       -----------
                 TOTAL CURRENT ASSETS                                                114,179            17,800
                                                                                 -----------       -----------

        PROPERTY AND EQUIPMENT
            Furniture and fixtures                                                     1,893             1,893
            Office equipment                                                           7,999             6,661
            Molds                                                                     70,000            70,000
                 Less accumulated depreciation                                        (3,858)           (3,017)
                                                                                 -----------       -----------
                 TOTAL PROPERTY AND EQUIPMENT                                         76,034            75,537
                                                                                 -----------       -----------

        OTHER ASSETS
            Deposits and retainers                                                    32,473            81,560
            License                                                                  525,000                --
            Patent acquisition and patent costs                                    1,966,726         1,966,726
                                                                                 -----------       -----------
                 TOTAL OTHER ASSETS                                                2,524,199         2,048,286
                                                                                 -----------       -----------

            TOTAL ASSETS                                                           2,714,412       $ 2,141,623
                                                                                 ===========       ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

        CURRENT LIABILITIES
            Accounts payable                                                          30,613       $        --
            Deposits                                                                   3,000                --
            Notes payable                                                             61,965            61,965
            Accrued interest                                                          16,062            12,989
            Due to related party                                                     260,000                --
            Deposits for stock                                                       100,000                --
            License payable                                                          250,000                --
                                                                                 -----------       -----------
                 TOTAL CURRENT LIABILITIES                                           721,640            74,954
                                                                                 -----------       -----------
        COMMITMENTS AND CONTINGENCIES                                                     --                --
                                                                                 -----------       -----------

        STOCKHOLDERS' EQUITY
            Preferred stock, 10,000,000 shares authorized,
                 $.001 par value; 500,000 shares issued and outstanding                  500               500
            Common stock, 200,000,000 shares authorized,
                 $.001 par value; 14,889,478 and 13,889,478 shares
                  issued and outstanding, respectively                                14,889            13,889
            Additional paid-in capital                                             3,337,257         3,066,257
            Stock options                                                            621,000           529,000
            Accumulated deficit during development stage                          (1,976,826)       (1,538,929)
            Other comprehensive loss                                                  (4,048)           (4,048)
                                                                                 -----------       -----------
            TOTAL STOCKHOLDERS' EQUITY                                             1,992,772         2,066,669
                                                                                 -----------       -----------

        TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                 2,714,412       $ 2,141,623
                                                                                 ===========       ===========
</TABLE>

             See accompanying notes and accountant's review report.

                                       3
<PAGE>


                              ENVIROKARE TECH, INC.
                          (A Development Stage Company)
          CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

<TABLE>
<CAPTION>
                                                                                                                    Period from
                                                     For the         For the         For the          For the      June 15, 1998
                                                   Three Months    Three Months     Six Months      Six Months    (Inception) to
                                                  Ended June 30,  Ended June 30,  Ended June 30,  Ended June 30,     June 30,
                                                       2001            2000            2001            2000            2001
                                                   (unaudited)     (unaudited)     (unaudited)     (unaudited)     (unaudited)
                                                  ------------    ------------    ------------    ------------    ---------------
<S>                                               <C>             <C>             <C>             <C>           <C>
REVENUES                                          $       --      $       --      $       --      $       --      $       --
                                                  ------------    ------------    ------------    ------------    ------------

EXPENSES
           Consulting fees - related parties           134,000           8,817         161,500          23,987         565,203
           Other consulting fees                        67,000          16,615         137,000          49,115         627,165
           Rent                                          2,704           2,292          13,104           4,584          36,199
           General and administrative                    9,382          41,518          37,903          66,404         264,006
           Depreciation                                    437             394             841             798           3,858
           Professional fees                             6,337          44,013          70,351          54,699         233,995
           Research and development                       --             7,009            --             7,009          98,669
           Wages, salaries, and payroll taxes           13,922          39,569          13,922          39,569         131,424
                                                  ------------    ------------    ------------    ------------    ------------
                TOTAL EXPENSES                         233,783         160,227         434,622         246,165       1,960,520
                                                  ------------    ------------    ------------    ------------    ------------

     LOSS FROM OPERATIONS                             (233,783)       (160,227)       (434,622)       (246,165)     (1,960,520)

     OTHER EXPENSES
           Interest expense                              1,604           1,544           3,275           3,095          16,306
                                                  ------------    ------------    ------------    ------------    ------------
                TOTAL OTHER EXPENSES                     1,604           1,544           3,275           3,095          16,306
                                                  ------------    ------------    ------------    ------------    ------------

     LOSS BEFORE PROVISION FOR INCOME TAXES           (235,387)       (161,771)       (437,897)       (249,260)     (1,976,826)

     PROVISION FOR INCOME TAXES                           --              --              --              --              --
                                                  ------------    ------------    ------------    ------------    ------------

     NET LOSS                                         (235,387)       (161,771)       (437,897)       (249,260)     (1,976,826)

     OTHER COMPREHENSIVE LOSS
           Foreign currency translation loss              --              (940)           --            (2,098)         (4,048)
                                                  ------------    ------------    ------------    ------------    ------------

     COMPREHENSIVE LOSS                           $   (235,387)   $   (162,711)   $   (437,897)   $   (251,358)   $ (1,980,874)
                                                  ============    ============    ============    ============    ============


           BASIC AND DILUTED NET LOSS
                PER COMMON SHARE                  $      (0.01)   $      (0.01)   $      (0.03)   $      (0.02)   $      (0.17)
                                                  ============    ============    ============    ============    ============

           WEIGHTED AVERAGE NUMBER
                OF BASIC AND DILUTED COMMON
                STOCK SHARES OUTSTANDING            13,911,456      11,089,478      13,900,528      10,917,809      11,401,665
                                                  ============    ============    ============    ============    ============
</TABLE>



             See accompanying notes and accountant's review report.

                                       4

<PAGE>

                                  ENVIROKARE TECH, INC.
                              (A Development Stage Company)
                      CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY


<TABLE>
<CAPTION>
                                                                Preferred Stock           Common Stock
                                                              --------------------   ---------------------   Additional
                                                                Number                 Number                  Paid-in
                                                              of Shares    Amount    of Shares     Amount      Capital
                                                              ---------   --------   ----------   --------   ----------
<S>                                                           <C>         <C>        <C>          <C>        <C>
Issuance of common stock in June, 1998
       for cash at $.001 per share                                 --     $     --     10,000,000   $ 10,000   $     --

Net loss for period ended December 31, 1998                        --           --           --         --           --
                                                              ---------   ----------   ----------   --------   ----------

Balance, December 31, 1998                                         --           --     10,000,000     10,000         --

Issuance of common stock at an average of $0.45
       per share for cash                                          --           --        746,140        746      334,053

Issuance of  preferred stock at $0.50 per share
       for cash                                                 500,000          500         --         --        249,500

Issuance of stock options for services                             --           --           --         --           --

Contribution of capital by shareholders in the form
       of foregone payment of accounts payable                     --           --           --         --          1,847

Net loss for year ended December 31, 1999                          --           --           --         --           --

Foreign currency translation loss                                  --           --           --         --           --
                                                              ---------   ----------   ----------   --------   ----------

Balance, December 31, 1999                                      500,000          500   10,746,140     10,746      585,400

Cash received for subscriptions receivable                         --           --           --         --           --

Issuance of common stock at an average of $0.45
       per share for cash                                          --           --        543,338        543      356,957

Expiration of stock options                                        --           --           --         --        120,000

Issuance of stock options for services                             --           --           --         --           --

Stock options exercised at $0.58 per share                         --           --        100,000        100       81,400

Stock issued for acquisition of Electroship Acquisition
       Corporation, a wholly owned subsidiary, at
       $0.77 per share                                             --           --      2,500,000      2,500    1,922,500

Net loss for the year ended December 31, 2000                      --           --           --         --           --

Foreign currency translation loss                                  --           --           --         --           --
                                                              ---------   ----------   ----------   --------   ----------

Balance, December 31, 2000                                      500,000          500   13,889,478     13,889    3,066,257

Expiration of stock options for the six months                     --           --           --         --
       ended June 30, 2001                                         --           --           --         --        132,000

Issuance of stock options for services for the six months
       ended June 30, 2001

Issuance of common stock at $0.14 per share for cash
       with attached warrants at $0.06 per share                                        1,000,000      1,000      139,000

Net loss for the six months ended June 30, 2001 (unaudited)        --           --           --         --           --
                                                              ---------   ----------   ----------   --------   ----------
Balance, June 30, 2001                                          500,000   $      500   14,889,478   $ 14,889   $3,337,257
                                                              =========   ==========   ==========   ========   ==========

<CAPTION>
                                                                                         Accumulated
                                                               Warrants                   Deficit
                                                                 and                       During        Other          Total
                                                                Stock    Subscriptions  Development  Comprehensive  Stockholders'
                                                               Options     Receivable      Stage         Loss         Equity
                                                              ---------  -------------  -----------  ------------   -------------
<S>                                                           <C>        <C>            <C>          <C>            <C>
Issuance of common stock in June, 1998
       for cash at $.001 per share                            $    --      $    --      $      --      $  --        $    10,000

Net loss for period ended December 31, 1998                        --           --          (34,427)      --            (34,427)
                                                              ---------    ---------    -----------    -------      -----------

Balance, December 31, 1998                                         --           --          (34,427)      --            (24,427)

Issuance of common stock at an average of $0.45
       per share for cash                                          --       (105,000)          --         --            229,799

Issuance of  preferred stock at $0.50 per share
       for cash                                                    --           --             --         --            250,000

Issuance of stock options for services                          552,000         --             --         --            552,000

Contribution of capital by shareholders in the form
       of foregone payment of accounts payable                     --           --             --         --              1,847

Net loss for year ended December 31, 1999                          --           --         (893,173)      --           (893,173)

Foreign currency translation loss                                  --           --             --       (1,202)          (1,202)
                                                              ---------    ---------    -----------    -------      -----------

Balance, December 31, 1999                                      552,000     (105,000)      (927,600)    (1,202)         114,844

Cash received for subscriptions receivable                         --        105,000           --         --            105,000

Issuance of common stock at an average of $0.45
       per share for cash                                          --           --             --         --            357,500

Expiration of stock options                                    (120,000)        --             --         --               --

Issuance of stock options for services                          121,000         --             --         --            121,000

Stock options exercised at $0.58 per share                      (24,000)        --             --         --             57,500

Stock issued for acquisition of Electroship Acquisition
       Corporation, a wholly owned subsidiary, at
       $0.77 per share                                             --           --             --         --          1,925,000

Net loss for the year ended December 31, 2000                      --           --         (611,329)      --           (611,329)

Foreign currency translation loss                                  --           --             --       (2,846)          (2,846)
                                                              ---------    ---------    -----------    -------      -----------

Balance, December 31, 2000                                      529,000         --       (1,538,929)    (4,048)       2,066,669

Expiration of stock options for the six months
       ended June 30, 2001                                     (132,000)        --             --         --               --

Issuance of stock options for services for the six months
       ended June 30, 2001                                      164,000                                                 164,000

Issuance of common stock at $0.14 per share for cash
       with attached warrants at $0.06 per share                 60,000                                                 200,000

Net loss for the six months ended June 30, 2001 (unaudited)        --           --         (437,897)      --           (437,897)
                                                              ---------    ---------    -----------    -------      -----------
Balance, June 30, 2001                                        $ 621,000    $       0    $(1,976,826)    (4,048)     $ 1,992,772
                                                              =========    =========    ===========    =======      ===========
</TABLE>


             See accompanying notes and accountant's review report.

                                        5
<PAGE>

                             ENVIROKARE TECH, INC.
                          (A Development Stage Company)
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                                                    Period from
                                                                                                                   June 15, 1998
                                                                                 For the Six      For the Six     (Inception) to
                                                                                Months Ended     Months Ended        June 30,
                                                                                June 30, 2001    June 30, 2000         2001
                                                                                 (unaudited)      (unaudited)       (unaudited)
                                                                                -------------    -------------    --------------
<S>                                                                             <C>              <C>              <C>
     CASH FLOWS FROM OPERATING ACTIVITIES:
            Net loss                                                               $(437,897)      $(249,260)      $(1,976,826)
            Adjustments to reconcile net loss
                 to net cash used by operating activities:
            Depreciation                                                                 841             798             3,858
            Stock options issued for consulting fees                                 164,000            --             837,000
            Consulting fees due to related party applied to receivable                  --              --               9,000
            Increase (decrease)  in prepaid expenses and deposits                     49,087         (24,106)          (32,473)
            Increase (decrease) in accounts payable and deposits                      33,613        (100,330)           33,613
            Increase in accrued interest receivable                                     (210)          3,096              (648)
            Increase in accrued interest payable                                       3,073            --              16,062
                                                                                   ---------       ---------       -----------

            Net cash used by operating activities                                   (187,493)       (369,802)       (1,110,414)
                                                                                   ---------       ---------       -----------

     CASH FLOWS FROM INVESTING ACTIVITIES:
            Loan to related party                                                       --              --             (15,000)
            Purchase of molds                                                           --           (70,000)          (70,000)
            Payments of license agreement                                           (275,000)           --            (275,000)
            Patent costs                                                                --            (3,659)           (8,396)
            Purchase of equipment                                                     (1,338)           (300)           (8,045)
                                                                                   ---------       ---------       -----------

            Net cash used in investing activities                                   (276,338)        (73,959)         (376,441)
                                                                                   ---------       ---------       -----------

     CASH FLOWS FROM FINANCING ACTIVITIES:
            Proceeds from sale of preferred stock                                       --              --             250,000
            Proceeds from sale of common stock                                       200,000         362,500           959,799
            Proceeds from deposit for stock                                          100,000            --             100,000
            Proceeds from issuance of notes payable to related party                 260,000            --             288,635
                                                                                   ---------       ---------       -----------

            Net cash provided by financing activities                                560,000         362,500         1,598,434
                                                                                   ---------       ---------       -----------

     Increase (decrease) in cash                                                      96,169         (81,261)          111,579

     Adjustment for foreign currency  translation                                       --            (2,098)           (4,048)

     Cash, beginning of period                                                        11,362         148,046              --
                                                                                   ---------       ---------       -----------

     Cash, end of period                                                           $ 107,531       $  64,687       $   107,531
                                                                                   =========       =========       ===========

     SUPPLEMENTAL CASH FLOW INFORMATION:

            Interest paid                                                          $    --         $    --         $      --
                                                                                   =========       =========       ===========

            Income taxes paid                                                      $    --         $    --         $      --
                                                                                   =========       =========       ===========

     NON-CASH TRANSACTIONS:

            Common stock issued for acquisition of subsidiary                      $    --         $    --         $ 1,925,000
            Note issued for purchase of property, equipment
                  and operating expenses                                           $    --         $    --         $     3,635
            Note issued for pending patent to related party                        $    --         $    --         $    33,330
            Stock options issued for consulting fees                               $ 164,000       $    --         $   837,000
            Stockholder's contribution for equipment                               $    --         $    --         $     1,847
            Payable for license agreement                                          $ 250,000       $    --         $   250,000

</TABLE>


             See accompanying notes and accountant's review report.

                                       6

<PAGE>

                              ENVIROKARE TECH, INC.
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                                  June 30, 2001


NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

Envirokare Tech, Inc., (hereinafter "the Company"), was incorporated in June
1998 under the laws of the State of Nevada. In December 1998, the Company
acquired the property, assets and undertakings of a business engaged in
manufacturing and developing a rubber mold technology and patent rights
potentially applicable to future development of a pallet made of recycled
materials. The Company is currently developing marketing and manufacturing plans
for the products under development. The Company maintains offices in Las Vegas,
Nevada and Boca Raton, Florida. The Company has elected a fiscal year-end of
December 31.

The Company includes the assets and investment in Electroship Acquisition
Corporation and Envirokare Composite Corp., wholly-owned non-operating
subsidiaries, in these financial statements. See Notes 3 and 6.

The Company is in the development stage and, as of June 30, 2001, had realized
no revenues from its planned operations.


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This summary of significant accounting policies of Envirokare Tech, Inc. is
presented to assist in understanding the Company's financial statements. The
financial statements and notes are representations of the Company's management,
which is responsible for their integrity and objectivity. These accounting
policies conform to accounting principles generally accepted in the United
States of America and have been consistently applied in the preparation of the
financial statements.

Going Concern

The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern.

As shown in the accompanying financial statements, the Company has incurred an
accumulated deficit of $1,976,826, which includes a net loss of $437,897 for the
six months ended June 30, 2001, and has a working capital deficit and no
revenues. The Company, being a development stage enterprise, is currently
putting technology in place which will, if successful, mitigate these factors
which raise substantial doubt about the Company's ability to continue as a going
concern. Management plans to fund operations from sales of its debt and equity
in the near-term and from product sales on an ongoing basis.

The Company has historically raised equity capital through the sale of its
common and preferred stock. Management has proceeded as planned in the ongoing
development of a recycled plastic composite pallet. The Company has worked with
contract laboratories to conduct in-depth analysis of compounds. Extrusion
methods and equipment modifications have been studied and refined, as have
initial prototypes. During the year ended December 31, 1999, the Company
contracted with Thermoplastic Composite Designs Inc. and Thermoplastic
Flowforming


                                       7
<PAGE>

                              ENVIROKARE TECH, INC.
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                                  June 30, 2001


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Going Concern (continued)

Technologies Corp. for professional and technical services in order to improve
the Company's prospective product offerings and manufacturing processes. The
finished product is expected to be available for distribution to potential
customers for in-use evaluation during the third quarter of year 2001.

The financial statements do not include any adjustments relating to the
recoverability and classification of recorded assets, or the amounts and
classification of liabilities that might be necessary in the event the Company
cannot continue in its present form.

Accounting Method

The Company's financial statements are prepared using the accrual method of
accounting.

Cash and Cash Equivalents

For purposes of the Statement of Cash Flows, the Company considers all
short-term debt securities purchased with a maturity of three months or less to
be cash equivalents.

Compensated Absences

Employees of the Company are entitled to paid vacation, paid sick days and
personal days off depending on job classification, length of service, and other
factors. The Company's policy is to recognize the cost of compensated absences
when actually paid to employees. If this accrual amount could be currently
estimated, it would not be recognized, as the amount would be deemed immaterial
at this time.

Development Stage Activities

The Company has been in the development stage since its formation in June 1998.
It is primarily engaged in the refinement of a manufacturing process which is
based on research findings for the development of pallets made of recycled
materials.

Derivative Instruments

The Financial Accounting Standards Board issued Statement of Financial
Accounting Standards ("SFAS") No. 133, "Accounting for Derivative Instruments
and Hedging Activities," as amended by SFAS No. 137, "Accounting for Derivative
Instruments and Hedging Activities - Deferral of the Effective Date of FASB No.
133", and SFAS No. 138, "Accounting for Certain Derivative Instruments and
Certain Hedging Activities", which is effective for the Company as of January 1,
2001. This standard establishes accounting and reporting standards for
derivative instruments, including certain derivative instruments embedded in
other contracts, and for hedging activities. It requires that an entity
recognize all derivatives as either assets or liabilities in the consolidated
balance sheet and measure those instruments at fair value.


                                       8
<PAGE>

                              ENVIROKARE TECH, INC.
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                                  June 30, 2001


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Derivative Instruments (continued)

If certain conditions are met, a derivative may be specifically designated as a
hedge, the objective of which is to match the timing of gain or loss recognition
on the hedging derivative with the recognition of (i) the changes in the fair
value of the hedged asset or liability that are attributable to the hedged risk
or (ii) the earnings effect of the hedged forecasted transaction. For a
derivative not designated as a hedging instrument, the gain or loss is
recognized in income in the period of change.

Historically, the Company has not entered into derivative contracts to hedge
existing risks or for speculative purposes.

At June 30, 2001, the Company has not engaged in any transactions that would be
considered derivative instruments or hedging activities.

Fair Value of Financial Instruments

The carrying amounts for cash, accounts payable, notes payable and accrued
liabilities approximate their fair value.

Impaired Asset Policy

In March 1995, the Financial Accounting Standards Board issued a statement
titled "Accounting for Impairment of Long-lived Assets." In complying with this
standard, the Company reviews its long-lived assets quarterly to determine if
any events or changes in circumstances have transpired which indicate that the
carrying value of its assets may not be recoverable. The Company does not
believe any adjustments are needed to the carrying value of its assets at June
30, 2001.

Interim Financial Statements

The interim financial statements as of and for the six months ended June 30,
2001 included herein have been prepared for the company without audit. They
reflect all adjustments which are, in the opinion of management, necessary to
present fairly the results of operations for these periods. All such adjustments
are normal recurring adjustments. The results of operations for the periods
presented are not necessarily indicative of the results to be expected for the
full fiscal year.

Loss Per Share

Loss per share was computed by dividing the net loss by the weighted average
number of shares outstanding during the period. The weighted average number of
shares was calculated by taking the number of shares outstanding and weighting
them by the amount of time that they were outstanding. Basic and diluted shares
outstanding are the same, as the inclusion of common stock equivalents would be
anti-dilutive. As of June 30, 2001, the Company had convertible preferred stock
and stock options equivalent to 12,650,000 common shares, which are considered
to be anti-dilutive.


                                       9
<PAGE>

                              ENVIROKARE TECH, INC.
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                                  June 30, 2001


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Principles of Consolidation

The Company's financial statements include the accounts of the Company and its
wholly-owned non-operating subsidiaries. All material intercompany transactions
and accounts have been eliminated in the financial statements.

Provision for Taxes

Income taxes are provided based upon the liability method of accounting pursuant
to SFAS No. 109 "Accounting for Income Taxes." Under this approach, deferred
income taxes are recorded to reflect the tax consequences on future years of
differences between the tax basis of assets and liabilities and their financial
reporting amounts at each year end. A valuation allowance is recorded against
deferred tax assets if management does not believe the Company has met the "more
likely than not" standard imposed by SFAS No. 109 to allow recognition of such
an asset.

At June 30, 2001, the Company had net deferred tax assets of approximately
$672,000 principally arising from net operating loss carryforwards for income
tax purposes. As management of the Company cannot determine that it is more
likely than not that the Company will realize the benefit of the net deferred
tax asset, a valuation allowance equal to the net deferred tax asset has been
established at June 30, 2001.

At June 30, 2001, the Company has net operating loss carryforwards of
approximately $1,975,000, which expire in the years 2018 through 2020.

Reclassification

The reclassification of expenses in the financial statements has resulted in
certain changes in presentation which have no effect on the reported net losses
or shareholders' equity for June 30, 2001 and December 2000, or the periods then
ended.

Accounting Pronouncements

In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 130, "Reporting Comprehensive Income" ("SFAS
No. 130"), and No. 131, "Disclosures about Segments of an Enterprise and Related
Information" ("SFAS No. 131"). SFAS 130 establishes standards for reporting and
displaying comprehensive income, its components and accumulated balances. SFAS
131 establishes standards for the way that companies report information about
operating segments in annual financial statements and requires reporting of
selected information about operating segments in interim financial statements.
Both SFAS 130 and SFAS 131 are effective for periods beginning after December
15, 1997. The Company adopted these new accounting standards, and the adoption
of SFAS 131 had no effect on the Company's financial statements and disclosures.
The adoption of SFAS 130, related to comprehensive income is disclosed in the
accompanying financial statements.


                                       10
<PAGE>

                              ENVIROKARE TECH, INC.
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                                  June 30, 2001


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Accounting Pronouncements (continued)

In September 2000, the FASB issued SFAS No. 140 "Accounting for Transfers and
Servicing of Financial Assets and Extinguishment of Liabilities." This statement
provides accounting and reporting standards for transfers and servicing of
financial assets and extinguishment of liabilities and also provides consistent
standards for distinguishing transfers of financial assets that are sales from
transfers that are secured borrowings. SFAS No. 140 is effective for recognition
and reclassification of collateral and for disclosures relating to
securitization transactions and collateral for fiscal years ending after
December 15, 2000, and is effective for transfers and servicing of financial
assets and extinguishments of liabilities occurring after March 31, 2001. The
Company believes that the adoption of this standard will not have a material
effect on the Company's results of operations or financial position.

Research and Development Costs

Costs of research and development are expensed as incurred.

Translation of Foreign Currency

Monetary assets and liabilities denominated in foreign currencies are translated
into United States dollars at rates of exchange in effect at the balance sheet
date. Gains or losses are included in income for the year, except gains or
losses relating to long-term debt which are deferred and amortized over the
remaining term of the debt. Non-monetary assets and liabilities and items
recorded in income arising from transactions denominated in foreign currencies
are translated at rates of exchange in effect at the date of the transaction.

Use of Estimates

The process of preparing financial statements in conformity with accounting
principles generally accepted in the United States of America requires the use
of estimates and assumptions regarding certain types of assets, liabilities,
revenues, and expenses. Such estimates primarily relate to unsettled
transactions and events as of the date of the financial statements.


NOTE 3 - INTANGIBLE ASSETS

In December 1998, the Company acquired technology rights from Mr. Real Morel and
his affiliated companies of International Pallet Control Systems Inc. and The
Pallet Company. The Company is currently investigating the patent process on
this technology. During the years ended December 31, 2000 and 1999, attorney
fees of $7,787 and $609, respectively, were added to patent costs. The
amortization of patent costs will begin when the final patents are granted. If
the Company does not obtain the patent, the costs of acquiring the patent rights
from its originator will be charged to operations.


                                       11
<PAGE>

                              ENVIROKARE TECH, INC.
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                                  June 30, 2001


NOTE 3 - INTANGIBLE ASSETS (continued)

On December 1, 2000 the Company through its wholly-owned subsidiary, Electroship
Acquisition Corporation, acquired technology rights, in exchange for shares of
the Company's common stock. See Note 6. The acquired technology rights relate to
an application stage patent for an invention that is expected to facilitate
shipping commerce and/or for processing information regarding shipping services
in a network environment. This acquisition was valued using the trading price of
the Company's common stock at the date of acquisition.

On March 30, 2001, the Company completed a license agreement with Thermoplastic
Composite Designs, Inc. (TCD) and received a license to manufacture the
Company's E Pallet(TM) and other products to be developed. The license fee is a
one-time fee of $525,000 to be paid by September 1, 2001. (See Note 5). As part
of the agreement, the Company was granted an option, exercisable for thirty (30)
months, to acquire TCD in exchange for Company's stock or cash in lieu of stock
for up to 50% of the agreed upon purchase price. This merger, if the option is
exercised, will require the Company to issue 3,000,000 shares of common stock in
exchange for all of the outstanding stock of TCD. If the market value of this
stock, when issued, is less than $15,000,000, the Company will elect to provide
additional shares of common stock or cash to the TCD stockholders. Any payment
of cash under this option shall not exceed $7,500,000. The Company has the sole
option to determine the amounts of additional stock or cash that would be paid
under the option. The Company has created a wholly-owned subsidiary, Envirokare
Composite Corp. to effect this specific transaction.


NOTE 4 - PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Depreciation is provided using the
straight line method over the estimated useful lives of the assets. The useful
lives of property, plant and equipment for purposes of computing depreciation
are five and seven years. The following is a summary of property, equipment and
accumulated depreciation.

                                             June 30,       December 31,
                                               2001             2000
                                           ----------       ------------
     Furniture and Fixtures                $   1,893        $     1,893
     Less:  Accumulated Depreciation             721                569
                                            ---------        -----------
     Net Furniture & Fixtures              $   1,172        $     1,297
                                            =========        ===========

     Office Equipment                      $   7,999        $     6,661
     Less:  Accumulated Depreciation           3,137              2,421
                                            ---------        -----------
     Net Office Equipment                  $   4,862        $     4,240
                                            =========        ===========

     Molds                                 $  70,000        $    70,000
                                            =========        ===========


                                       12
<PAGE>

                              ENVIROKARE TECH, INC.
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                                  June 30, 2001


NOTE 4 - PROPERTY AND EQUIPMENT (continued)

The Company, in the development of its pallet products, has acquired molds,
which will be depreciated over their expected useful lives, which currently has
not been determined. The molds are currently carried at cost and the Company is
continuing its research and development using these molds. When completed and
placed in service the molds will be depreciated over their expected useful
lives. See Note 10.


NOTE 5 - SHORT-TERM DEBT

Short-term notes payable at June 30, 2001 and December 31, 2000 consist of
unsecured notes bearing 10% interest. These notes, which originated between
August 18, 1998 and December 16, 1998, are payable to Mr. Real Morel and are due
on demand. The principal amount on the notes is $61,965. Interest expense
recorded on the notes payable at June 30, 2001 and December 31, 2000 was $16,062
and $12,989, respectively.

The Company is a named defendant in an action filed by Mr. Real Morel in the
Supreme Court of British Columbia, Canada, under which the Company was served in
May 2000. In this action, Mr. Morel alleges non-payment by the Company of
amounts due pursuant to the aforementioned demand promissory notes. After
consultation with British Columbia legal counsel and a review of the
circumstances surrounding the issuance of the notes, the Company has resolved to
dispute this liability. Management of the Company believes that the outcome will
not have a material adverse effect on the financial position of the Company.

On March 30, 2001, the Company entered into a license agreement for intellectual
property with TCD for $525,000. This amount is to be paid in full by September
1, 2001. See Note 3.

During March and April 2001, the Company received deposits of $156,000 and
$44,000 cash, respectively for qualified stock purchase agreements. Common stock
shares were issued on June 29, 2001 for these deposits.

See Note 9 for discussion concerning a loan payable to a shareholder.

NOTE 6 - COMMON STOCK

Upon incorporation on September 15, 1998, 10,000,000 shares of common stock were
issued at $.001 per share, under Regulation D, Rule 504. At December 31, 1998,
this common stock was held by 30 shareholders, none of whom held in excess of
ten percent of the total.


                                       13
<PAGE>

                              ENVIROKARE TECH, INC.
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                                  June 30, 2001


NOTE 6 - COMMON STOCK (continued)

On February 22, 1999, the Board of Directors authorized a 1-for-2 reverse stock
split of the Company's $0.001 par value common stock.

During the year ended December 31, 1999, 746,140 shares of common stock were
issued for cash. At December 31, 1999, the balance of stock subscriptions was
$105,000. Stock subscriptions were paid and stock issued February 16, 2000 for
these common stock shares.

During the month of February 2000, 343,338 shares of common stock were issued at
$0.75 per share. The Company's common stock was split 2-for-1 in March 2000. The
split was effected as a 100% stock dividend payable March 6, 2000 to holders of
record at March 1, 2000. All references in the accompanying financial statements
to the number of common shares and per share amounts for the years ended
December 31, 2000 and 1999 have been restated to reflect the stock split.

During September 2000, 200,000 shares of common stock were issued at $0.50 per
share. These shares were issued in reliance upon the exemption from the
registration requirements of the Securities Act of 1933 specified by the
provisions of Regulation S.

During December 2000, 100,000 stock options were exercised at $0.575 per common
stock share. These stock options were granted under the 1999 Stock Plan.

On December 1, 2000, Electroship Acquisition Corporation, a wholly-owned
subsidiary of the Company, acquired Electroship (N.Y.) Inc. in exchange for
2,500,000 common stock shares. These shares were valued at $0.77 per share,
which was fair market value on the date of the acquisition agreement. See Note
3. Electroship Acquisition Corporation acquired the intellectual property
previously held by Electroship (N.Y.) Inc. which was previously a partnership
created to hold the intellectual property rights. Neither Electroship (N.Y.)
Inc., nor its predecessor partnership were considered operating entities.
Neither entity had material transactions during 2000. As such, no proforma
financial information is contained in these disclosures.

During June 2001, 1,000,000 shares of common stock with one warrant attached to
each common share were issued at $0.20 per share. Each warrant is exercisable at
$0.50 per share until June 30, 2003. These shares were issued in reliance upon
the exemption from the registration requirements of the Securities Act of 1933
under regulation D as specified by the provisions of Regulation S and Rule 506.



                                       14
<PAGE>

                              ENVIROKARE TECH, INC.
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                                  June 30, 2001


NOTE 7 - PREFERRED STOCK

During the year ended December 31, 1999, 500,000 shares of preferred stock were
issued for $250,000 cash. The preferred stock has no dividend rights, but is
convertible to common stock at the rate of ten shares of common for each
preferred share. This conversion feature was modified to twenty shares to one by
the stock split effective March 1, 2000.


NOTE 8 - STOCK OPTIONS

In September 1999, the Board of Directors (the "Board") of the Company adopted
the Envirokare Tech, Inc. 1999 Stock Plan (the "Plan"), subject to approval of
the Company's shareholders. The shareholders approved the plan at the Annual
Meeting of the Company's shareholders in May 2000. As adopted, the Plan provided
for authorization of 2,000,000 shares of common stock for issuance pursuant to
awards under the Plan. In September 1999, the Board had approved the granting of
non-qualified options under the Plan to purchase an aggregate 1,150,000 shares
of common stock. In June 2000, the Board voted to adjust the number of shares of
common stock authorized for issuance under the Plan from 2,000,000 to 4,000,000,
pursuant to the anti-dilution provisions of the Plan, to reflect the 2-for-1
split of the Company's common stock effected in March 2000. The Board also voted
to make corresponding adjustments to the number of shares subject to previous
option grants and to the exercise prices for such options.

The Company filed a Form S-8 under the Securities Act of 1933 (the "Securities
Act") with the Securities and Exchange Commission in March 2000 to register
1,150,000 shares (2,300,000 as adjusted for the stock split) of common stock
authorized for issuance under the Plan. In September 2000, the Company filed
Post-Effective Amendment No. 1 to the Form S-8, to register the remaining
1,700,000 shares under the Securities Act.

The purposes of the 1999 Stock Plan are to attract, retain and motivate
employees, directors and consultants of the Company. In accordance with
Statement on Financial Accounting Standard No. 123, the fair value of the
options granted was estimated using the Black-Scholes Option Price Calculation.
The following assumptions were made to value the stock options: risk-free
interest rate at 5%, expected life at 10 years, and expected volatility at 30%.
For the year ended December 31, 1999, the Company recorded $552,000 ($.24 per
option) in consulting fees for the value of the options based upon these
Black-Scholes assumptions. These stock options will expire September 29, 2009.
(See Note 9). The plan also requires early exercising of the options for various
reasons, including employment termination, separation from services, or
cancellation of consulting contracts.

All of the option grants made by the Company during 1999 and 2000 provide that
the options are exercisable immediately. The Plan restricts sales for shares
received upon exercise of non-qualified options, limiting each optionee to sales
in any year of option shares equal to 25% of the total number of shares received
under the optionee's grant. As of December 31, 2000, there remained 1,700,000
shares of common stock available for issuance under the Plan. See Note 9.


                                       15
<PAGE>

                              ENVIROKARE TECH, INC.
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                                  June 30, 2001


NOTE 8 - STOCK OPTIONS (continued)

On March 6, 2001, stock options totaling 300,000 expired. These stock options
were valued at $0.24 per option for a total of $72,000. On June 28, 2001, stock
options totaling 250,000 expired. These stock options were valued at $0.24 per
option for a total of $60,000. On January 16, 2001, stock options totaling
100,000 were issued. These options were valued at $0.29 per option for a total
of $29,000. On March 14, 2001, stock options totaling 700,000 were issued. These
options were valued at $0.15 per option for a total of $105,000. On June 28,
2001, stock options totaling 200,000 were issued. These stock options were
valued at $0.15 per option for a total of $30,000.

                                                    Fixed Plan
                                         --------------------------------
                                                                Weighted
                                                                 Average
                                           Number of            Exercise
                                            Shares                Price
                                         ------------         -----------

Outstanding at December 31, 1998                   --                  --
Granted                                     2,300,000               0.575
                                         ------------         -----------

Outstanding at December 31, 1999            2,300,000               0.575
Expired                                     (500,000)               0.575
Granted                                       500,000               0.500
Exercised                                   (100,000)               0.575
                                         ------------         -----------
Outstanding at December 31, 2000            2,200,000               0.558
                                         ------------         -----------

Expired                                     (550,000)               0.575
Granted                                       100,000                0.60
Granted                                       900,000                0.30
                                         ------------         -----------
Outstanding at June 30, 2001                2,650,000               0.468
                                         ============         ===========

Options Exercisable at June 30, 2001        2,650,000        $      0.468
                                         ============         ===========

Weighted average fair value of
options granted during the fiscal
year ended June 30, 2001                        $0.16
                                         ------------


                                       16
<PAGE>

                              ENVIROKARE TECH, INC.
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                                  June 30, 2001


NOTE 9 - RELATED PARTIES

Jeannie M. Runnalls, who was appointed president, secretary, and director of the
Company on January 24, 2000, received $32,988 for consulting fees during the
year ended December 31, 2000. Ms. Runnalls received $22,715 in cash for
consulting fees during the year ended December 31, 1999.

On August 8, 2000, the Company authorized a shareholder's loan to Ms. Runnalls
in the amount of $15,000. Terms of the unsecured, demand loan require interest
payments of 7% per annum simple interest. The shareholder loan balance,
including accrued interest, at June 30, 2001 was $6,648.

Stock options of 2,300,000 were issued for common stock shares during the year
ended December 31, 1999. Of these stock options, 1,000,000 were issued to
related parties. During the year ended December 31, 2000, the Company granted
200,000 stock options for common stock shares to the then president of the
Company. (See Note 8.) On December 11, 2000, the president of the Company
resigned and is currently a member of the board of directors of the Company.

During 2001, a shareholder loaned the Company $260,000. This amount bears no
interest or specified terms of repayment. It is the Company's intent to pay this
shareholder loan by the year ending December 31, 2001.

On January 16, 2001, the Company granted 100,000 stock options for common stock
shares to Trevor Bedford, who is currently a member of the board of directors of
the Company.

On March 14, 2001, the Company granted 100,000 stock options for common stock
shares to Charles Stein, then president of the Company. (See Note 8.) Effective
May 1, 2001, Mr. Stein resigned as president of the Company and is currently a
member of the board of directors of the Company.

On March 14, 2001, the Company granted 300,000 stock options for common stock
shares each to Gerald Breslauer, the vice president of administration of the
Company, and Mark Kallan, the executive vice president of the Company.



                                       17
<PAGE>

                              ENVIROKARE TECH, INC.
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                                  June 30, 2001


NOTE 10 - COMMITMENTS AND CONTINGENCIES

Consulting Agreements
The Company entered into employment contracts with Charles H. Stein, Mark
Kallan, and Gerald Breslauer dated December 18, 2000. These contracts call for
compensation totaling $144,000 annually commencing on December 31, 2000 and
ending on December 31, 2005. These employment contracts also carry stock options
which have been included in the stock options calculation. The employment
contract with Charles H. Stein was canceled effective May 1, 2001. This contract
carried an employment cancellation fee of $20,000 to be paid to Charles H. Stein
at $2,000 per month for ten months commencing on June 1, 2001. The employment
contracts for Mark Kallan and Gerald Breslauer were amended by contracts, dated
March 14, 2001 that call for compensation totaling $84,000 annually ending
December 31, 2005.

Lease Agreements
The Company entered into a lease for office space in Las Vegas, Nevada for the
period of thirty-six months beginning October 1, 1998. Monthly payments are
currently $800 per month, including $40 for utilities. In compliance with the
terms of the lease, the Company has purchased comprehensive public liability
insurance. Future annual minimum lease payments for the term of the lease as of
June 30, 2001 are as follows for the years ending December 31:


                         2001                     $2280


The Company entered into a lease for office space in Boca Raton, Florida on
February 7, 2001 for sixty months. Monthly payments of the lease are currently
$2,794.50 per month with additional charges for common area. A security deposit
and last months rent was paid in the amount of $8,412. A portion of this office
space is being subleased with the sub-lessee reimbursing the Company $3,000 of
the security deposit and last months rent. There is no written sublease
agreement at this time. Future annual minimum lease payments for the term of the
lease as of June 30, 2001 are as follows for the years ending December 31:

                         2001                     $16,767
                         2002                     $34,764
                         2003                     $36,156
                         2004                     $37,605
                         2005                     $39,109



                                       18
<PAGE>

                              ENVIROKARE TECH, INC.
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                                  June 30, 2001


NOTE 10 - COMMITMENTS AND CONTINGENCIES (continued)

Development Contract

In November 1999, the Company entered into a product/technology development
contract with Thermoplastic Composite Designs, Inc. (TCD), whereby TCD would
provide professional and technical services to the Company. Terms of the
contract required TCD to, among other matters, modify the Company's pallet
design, provide pallet material specifications, supply the pallet molds, and
develop pallet prototypes and demonstration units. The total payable by the
Company under this contract was $133,800. During the year ended December 31,
1999, the amount paid was $50,800 leaving a balance owing of $83,000. During the
period ended June 30, 2000, this balance was paid. The Company capitalized
$70,000 of these research and development costs as prepaid expenses at December
31, 1999 to reflect the value of the molds derived from this contract. As of
June 30, 2000, this prepaid expense of $70,000 was reclassified as molds, a
depreciable component of the Company's property and equipment.

Litigation

For information on the Company's litigation, see Note 5.



                                       19
<PAGE>


Item 2.  Plan of Operation

     This Form 10-QSB  contains some  statements  that the Company  believes are
"forward-looking  statements."  Forward-looking  statements  include  statements
about the future of the pallet industry,  statements about future business plans
and  strategies,  and most other  statements  that are not historical in nature.
Because  forward-looking  statements involve risks and uncertainties,  there are
factors,  including those discussed below, that could cause actual results to be
materially  different  from any  future  results,  performance  or  achievements
expressed or implied.  The Company has  attempted to identify the major  factors
that could cause differences between actual and planned or expected results, but
there can be no assurance  that the Company has identified all of those factors.
Accordingly,   readers  should  not  place  undue  reliance  on  forward-looking
statements.   Also,   the  Company  has  no   obligation   to  publicly   update
forward-looking statements it makes in this Form 10-QSB.


     Overview

     The Company is currently in the development stage and has not yet generated
any  operating  revenues.  Since its  inception  in June 1998,  the  Company has
developed a single piece molded  pallet,  E  Pallet(TM)  (sometimes  referred to
herein as the "Pallet"),  manufactured primarily from thermoplastics,  including
recycled  plastics.  The  Company's  management  expects  that the Company  will
commence  commercial  production  and sale of the Pallet  sometime in 2002.  The
Company is completing development of the Pallet and several other industrial and
commercial products,  through a licensing agreement with Thermoplastic Composite
Designs,  Inc.  ("TCD"),  a research  and  development  organization,  which has
developed or secured certain patented  products and processes.  See " -- License
Agreement  with  TCD,"  below,  for  discussion  of  the  Company's   licensing,
manufacturing and other agreements with TCD.

     The Company had originally  planned to have licensees  begin  producing the
Pallet in 2000,  but  decided to conduct  additional  tests,  which  delayed the
previously  planned  production  start  date.  The  discovery  of  significantly
improved  substrate  technology  caused the  Company to  rethink  their  initial
production   start  dates,  as  well  as  production  and  marketing   strategy.
Consequently, additional product development and testing was required that would
be specific to the  improved  substrate  composition,  prior to  initiating  the
launch of production operations.

     Although the Company's  decision to further develop and test the Pallet has
set back production  dates, the Company  believes that this additional  research
and development has substantially minimized or eliminated any concerns as to the
Pallet's


                                       20
<PAGE>


design and ability to perform. The Company's testing program has included
in-depth analysis of substrate compounds, extrusion methods and equipment
modifications. Initial prototypes of the Pallet have been developed and refined.
The Company expects to have potential customers evaluate the Pallet through
in-use testing beginning in the third quarter of 2001. Company management
anticipates that the Company will commence commercial production of the Pallet,
once appropriate production facilities are procured and commissioned for
production, currently anticipated for sometime in 2002.

     Liquidity and Capital Resources

     The Company is not yet generating  revenues.  For the six months ended June
30,  2001,  the  Company  had a net loss of  $437,897.  The  Company's  net loss
accumulated  for the period from June 15, 1998  (inception) to June 30, 2001 was
$1,976,826.  The  Company  anticipates  that it will begin to  generate  revenue
during 2002,  upon the planned  start of  production  of the E Pallet(TM) by the
Company. At June 30, 2001 the Company had current assets of $114,179, consisting
of $107,531 in cash and $6,648 in a related  party loan  receivable.  During the
six months  ended June 30,  2001,  the  Company's  cash  resources  increased by
$96,169 as a result of cash raised by issuance of the Company's common stock for
aggregate proceeds to the Company of $200,000 and by a loan from a related party
in the amount of $260,000,  offset by general and administrative  costs. At June
30,  2001 the  Company had current  liabilities  of  $721,460.  At June 30, 2001
current liabilities exceeded current assets by $607,461. Other than as discussed
above,  the  Company  is  not  aware  of any  trends,  demands,  commitments  or
uncertainties,  other than those affecting  business and the economy in general,
that could result in the  Company's  liquidity  decreasing  or  increasing  in a
material way within the next 12 months.

     To date,  the Company has raised  capital  through  private  placements  of
common  stock  and  convertible   preferred  stock.  The  Company  has  budgeted
pre-production and other  production-related  expenditures for the twelve months
through June 30, 2002 of $720,000,  excluding  license fees which may become due
and payable,  and plans to raise  additional funds in the next several months to
cover its proposed  expenditures.  These funds may be raised through  additional
equity financings, as well as borrowings and other resources.

     Since late 2000,  the Company has been  attempting to raise equity  capital
through a private  placement  but  encountered  difficulties  due in part to the
current volatile  condition of the equity markets.  The Company believes that it
has recently overcome such difficulties, as it has completed a private placement
consisting  of units of the  Company's  common  stock and  warrants  to purchase
common stock. See "Part II -- Other Information. Item 2. Changes in Securities."
Additionally,  the Company is currently  undertaking a new private  placement of
units  consisting of a promissory  note that bears interest at a rate of 15% per
annum and a warrant to purchase three (3) shares of the Company's  common stock,
at an exercise price of $0.195 per share, exercisable for two


                                       21
<PAGE>


(2) years from the date of subscription. To date, the Company has raised One
Hundred Thousand Dollars ($100,000) in this offering.

     The Company is currently holding discussions with potential investors. With
the capital it has raised to date, and the additional funds it plans to raise in
the next several  months,  the Company  believes  that it can continue  with its
production and marketing plans,  which in the short term include the start-up of
Pallet  manufacturing  operations,   and  in  the  longer  term  include  adding
additional  production  lines and expanding the product line mix.  Management of
the Company  believes that its financing plans described above will enable it to
meet its obligations  including cash  requirements  for at least the next twelve
months to June 30, 2002.

     To achieve and  maintain  competitiveness  of its  products  and to conduct
further  testing and  development  that will allow the Company to enter into the
production stage of operations, the Company may be required to raise substantial
funds in addition to funds already  raised through the issuance of the Company's
shares.  There can be no  assurance  that  additional  funding will be available
under  favorable  terms,  if at all. If adequate  funds are not  available,  the
Company may be required to curtail operations  significantly.  For example,  the
Company's  plans  include  the  possibility  of  setting  up its own  production
operations,  in addition to having  licensees  produce various Company  products
under development.  If the Company cannot raise enough funds, it may not be able
to carry  out a plan to set up its own  manufacturing  operations.  The  Company
might  also  have to  obtain  funds  through  entering  into  arrangements  with
collaborative  partners or others.  That could require the Company to relinquish
rights to certain  products,  which could impair future  sources of revenues for
the Company.

     Products; Product Development

     The Company's first product will be the E Pallet(TM), made through a unique
manufacturing  process,  which  allows for 80% of the  material  to be  recycled
thermoplastics. This process is called Thermoplastic Flow Forming ("TPF Process"
or "Process"). See " -- TPF Process," below.

Key advantages of the Company's Pallet will include increased strength and
durability, lighter weight, environmental benefits (i.e., no lumber required,
100% recyclable, no fungicides/bacterial spraying required, no land fill dumping
and less energy to manufacture) increased safety, because there is no
splintering of wood or hazardous nails/bolts, increased ease of use (because of
4 way entry access into the Pallet), longer life cycle, and lower costs per
pallet-round-trip. The Pallet has also been designed to resist damage caused
from use and to handle large loads when evenly loaded. The single piece
construction of the Pallet is expected to mitigate numerous product and personal
liability issues that occur in typical pallet programs. As there are no
fasteners or components to


                                       22
<PAGE>


break apart from the Pallet, the Company anticipates that its customers will
experience reduced pallet breakage.

     The Company has been actively involved in extensive testing and development
of the  Pallet.  The  Company's  development  focus is to ensure that the Pallet
meets or exceeds  current market  standards and that the Pallet will be superior
in  performance  and will be cost  effective to produce and sell. In particular,
the Company's  development  efforts focus on the safety,  structural  integrity,
reliability,  and cost effectiveness of the Pallet,  involving in-depth analysis
of  compound   variables  and   strengths,   extrusion   methods  and  equipment
modifications.

     The Company  contracted with substrate  component  testing engineers in the
Akron,  Ohio area during 1999 who  performed  the  primary  series of  substrate
component  testing.  Subsequent to the preliminary  tests conducted on substrate
components,  the Company and TCD entered into a  product/technology  development
contract in connection  with TCD's  assisting  the Company in modifying  earlier
versions of the Pallet  design.  The  contract  required TCD to deliver a pallet
that would meet design specifications including: a 48-inch by 40-inch dimension;
a maximum weight requirement;  and a target substrate composition.  The contract
also  provided  that TCD would supply the  appropriate  engineered  mold for the
Company's first production facility.

     Additional   Pallet  testing  and  evaluation  was  conducted  at  Virginia
Polytechnic Institute and State University, in Blacksburg, Virginia, through the
William H. Sardo Jr. Pallet and Container Research Laboratories.  Pallet testing
commenced  during May 2000.  Initial test results at this facility  provided the
basis from which the Company and its product design contractor were able to make
design adjustments resulting in a significantly  improved Pallet. Further Pallet
testing and evaluation  through January 2001 resulted in other minor adjustments
to  the  Pallet  design  to  bring  the  Pallet  up to the  Company's  specified
standards.

     The Company  believes that after extensive  studies and refinement,  it has
minimized or  eliminated  any concerns as to the Pallet's  design and ability to
perform.  The  Company  plans to conduct  further  testing  during the third and
fourth  quarters of 2001,  which it believes will provide  information as to the
longevity  of the Pallet  compared  to other  materials  and  provide  marketing
strategies  for the  Company.  Analysis  to date  indicates  that the  Company's
standard  48-inch by 40-inch  Pallet will surpass  current  hardwood and plastic
pallet  performance  and  will be a strong  competitor  in the  pallet  industry
worldwide.

     The  Company's  Pallet  design  presents  what the  Company  believes  is a
preferable  alternative  to pallets made from wood and from non-wood  materials.
Pallets had  traditionally  been made of wood but, due to  escalating  commodity
lumber prices and associated higher costs of wood pallets,  pallet manufacturers
have in recent years been


                                       23
<PAGE>


developing ways to manufacture pallets from non-wood materials, in particular,
metal, wood derivatives and plastic. However, each of these materials has its
disadvantages. Metal pallets, while they are strong, hard to damage, and
repairable, are expensive and not practical for general use. Pallets made from
pressed wood fiber and corrugated fiber board are light and recyclable. However,
most pallets manufactured from this type of substrate are not able to carry
standard load weights, are susceptible to damage, and cannot be repaired. The
most prevalent non-wood pallet material, plastic, is more cost-effective than
wood but is nonetheless expensive. Also, plastic pallets can be damaged by
forklift tines, or by being dropped, twisted or overloaded. They can also
splinter, causing injuries to workers. The Company believes that the recent
rapid increase in market share for plastic pallets indicates that pallet buyers
understand the benefits of utilizing substitutes for wood pallets. This presents
a market opportunity for the Company, as the Company considers the Pallet to be
a durable product and a cost-effective plastic pallet alternative.

     The Company believes that its  specialization  in thermoplastic  composites
will  provide  a   competitive   advantage  in  the  future.   Until   recently,
thermoplastic composites were not considered commercially viable substitutes for
thermoset composites, wood, aluminum, steel, and other metal alloys. However the
recent  introduction  of  long-strand   reinforcing  fiber(s)  has  dramatically
increased the mechanical and physical  properties of  thermoplastic  composites.
During past years, these composite materials were utilized almost exclusively be
the  military  and  aerospace  industries,  due to the  inordinate  cost of hand
application, normally confined to smaller parts.

     TPF  Process.  The TPF Process is a  proprietary  process  that enables the
manufacturer to create large structural parts using  thermoplastic  resins.  The
Process uses  recycled or virgin  resins and is designed to reuse its own waste,
thereby minimizing the creation of waste by-products.

     The TPF  Process can  potentially  be used to create  products  for a broad
range  of  industries  including:  Material  Handling,  Transportation,  Marine,
Medical,  Waste  Management  and  Aerospace.  The composite  materials  products
created  using the Process  have the ability to mimic many  attributes  found in
wood,  aluminum,  steel,  and other metal alloys matching many of their physical
and  mechanical   properties  while  providing   significant   weight  and  cost
reductions.  Another  advantage  of the  Process  is that it does  not  emit any
Volatile  Organic  Contaminants  (VOCs),  which are  present  in many  thermoset
composites.

     Management  believes that the TPF Process will give  Envirokare the ability
to produce large  structural  parts at prices projected to be well below current
levels.  This  price  advantage  is the  result  of  projected  savings  for the
following reasons:


                                       24
<PAGE>


     o Economies of scale as a result of the  mechanical  reproduction  of large
structural parts,  rather than  necessitating  manufacture of smaller components
followed by component assembly.

     o Reduced labor costs because of fewer component assemblies required.

     o Reduced cost of  materials,  due to the ability to reuse waste  generated
from manufacturing.


     Acquisition of Electroship (N.Y.) Inc.

     On December 21, 2000,  the Company,  Electroship  Acquisition  Corp., a New
York  corporation  and a  wholly-owned  subsidiary  of Envirokare  ("EAC"),  and
Electroship (N.Y.) Inc., a New York corporation  ("Electroship") consummated the
merger of  Electroship  with and into EAC with EAC  continuing  as the surviving
corporation (the "Merger").  The consideration received by Electroship Partners,
the former  shareholder  of  Electroship,  in the Merger  consisted of 2,500,000
shares  of  the  common  stock,  par  value  $.001  per  share,  of  Envirokare.
Electroship  Partners has since dissolved and distributed its assets,  including
such shares, among its former partners.  Electroship was engaged in the business
of developing wireless tracking technology for the shipping industry.

     The  primary  asset that the  Company  acquired in this merger was a patent
that had been  provisionally  filed by Electroship with the United States Patent
and Trade Office  ("USPTO").  The Company  anticipates  that patents that may be
issued as a result of the  provisional  filing will  provide  the Company  with,
among other  potential  wireless  product  developments,  the ability to develop
materials handling products that will have wireless tracking capability.  Design
work commenced on initial wireless Pallet prototypes during the first quarter of
2001.


     License Agreement with TCD

     The Company announced,  on December 1, 2000, that it had completed a letter
of  intent  with  TCD to  enter  into an  arrangement  to  manufacture  products
utilizing TCD's TPF process.  The Company,  through  Envirokare  Composite Corp.
("ECC"), its wholly-owned  subsidiary,  and TCD completed a license agreement on
March 30,  2001  pursuant  to which  Envirokare's  proprietary  pallet and other
products  to be  developed  will be  manufactured  using TCD's  proprietary  TPF
process.  The license agreement  provides that Envirokare will make a payment in
the amount of Four Hundred and Fifty  Thousand  dollars  ($450,000) to TCD. This
payment is in addition to a deposit held on  Envirokare's  account by TCD in the
amount of Seventy-five  Thousand dollars ($75,000).  This deposit was applied to
the license fee payable to TCD during June 2001. The balance due to TCD


                                       25
<PAGE>


under the license agreement, as of June 30, 2001, was Two Hundred Fifty Thousand
dollars ($250,000).

     Envirokare  and ECC also entered into a merger  agreement  with TCD,  which
provides  that  TCD  will  merge  with  ECC if  Envirokare's  shares  trade at a
specified  level during the thirty (30) month  period  following  the  agreement
date. In the event that  Envirokare's  shares have not traded at such  specified
level by the end of the thirty (30) month period,  then ECC and Envirokare  have
the option to effect the merger of TCD with ECC by paying to TCD's  shareholders
additional consideration, either in cash or additional shares of Envirokare.


     Anticipated Revenue Sources; Marketing and Distribution

     The Company plans to generate  revenues from  developing  and operating its
own  manufacturing  facilities in  conjunction  with TCD's  production  facility
development  assistance.  As opportunities present themselves,  the Company will
also consider entering into national and international  licensing agreements for
manufacture  and  production  of the Pallet and other  contemplated  products by
third parties,  which would provide  license fees and royalty  revenues based on
units of production.

     The Company had originally  planned to have licensees  begin  producing the
Pallet  during  2000 but  decided to conduct  additional  product  tests,  which
delayed a  previously  planned  production  start date.  Significantly  improved
substrate  technology  developments caused the Company to rethink their business
plan which  included the method of marketing  the Pallet and initial  production
start-up  dates.  The  Company  now  expects to begin  production  of the Pallet
sometime in 2002.

     In December  1999,  the Company  announced that it had received a letter of
intent from Cultech  International  Corporation  to  manufacture  and market the
Pallet in Asia. Cultech intends to obtain exclusive  manufacturing and marketing
rights to the Pallet for all of Asia. The parties agreed in principle that, once
engineering studies were satisfactorily  completed, the parties would enter into
an  agreement  whereby  Cultech  would make  payments to the  Company  including
licensing  fees and  royalty  payments  based on  units  of  Pallet  production,
although  the letter of intent does not  obligate the Company to enter into such
an agreement.  To date,  the Company has taken no further action with respect to
the letter of intent.

     Also in March 2000, the Company announced that it had received a production
and marketing  letter of intent from  International  Pallets of California.  The
letter of intent  provides for the parties to  negotiate  an  agreement  whereby
International  Pallets  would  build a  production  facility  that  would  allow
International Pallets to produce, market and


                                       26
<PAGE>


sell the Pallet in California and Nevada, although the letter does not obligate
the Company to enter into such an agreement. In the event a formal agreement
were negotiated between the parties, the agreement would include provisions
providing for International Pallets to pay a license fee and royalty payments to
the Company. To date, the Company has taken no further action with respect to
the letter of intent.

     Employees

     The  Company  currently  has  two  employees.  Management  of  the  Company
anticipates using consultants for business,  accounting and engineering services
on an as-needed basis.

     Amendments to Employment Contracts

     Effective as of December 22, 2000, the Company had entered into  employment
contracts with Charles H. Stein,  currently Vice Chairman of the Board;  Mark L.
Kallan,  Executive  Vice  President;  and Gerald  Breslauer,  Vice  President of
Administration,  Secretary and  Treasurer.  The contracts were  preliminary  and
subject to  renegotiation.  See "Item 10.  Executive  Compensation -- Employment
Contracts and Termination of Employment and  Change-in-Control  Arrangements" in
the Company's Annual Report on Form 10-KSB for the year ended December 31, 2000.

     Each  of  the  contracts  was  amended  pursuant  to an  amendatory  letter
agreement (the "Amendment"),  dated March 14, 2001, between the Company and each
of Messrs.  Stein,  Kallan and Breslauer.  The Amendment  provided,  among other
things, that the number of shares to be granted under option would be 500,000 as
to Mr.  Stein,  and  300,000  as to each of Mr.  Kallan and Mr.  Breslauer.  The
Amendment further provided, as to Mr. Stein, that if he were not instrumental in
helping the Company secure $200,000 through the private  placement of its common
shares by April 23, 2001,  (i) he would agree to the  reduction of the number of
shares to be granted to him under such  option to 100,000  and (ii) the  Company
could cancel Mr. Stein's employment  contract with the Company at any time after
April 23,  2001,  upon  payment to Mr.  Stein of  $20,000.  The  Amendment  also
provided for monthly  remuneration  for Messrs.  Stein,  Kallan and Breslauer of
$6,000, $3,000 and $4,000, respectively, subject to increases for Mr. Kallan and
Breslauer  based on the amount of time each  allocates  to the  business  of the
Company.

     Pursuant to a letter agreement (the "Stein Letter  Agreement") dated May 8,
2001,  between the Company and Mr. Stein,  the Company  confirmed  that it would
reduce  the number of shares to be granted  to Mr.  Stein  under such  option to
100,000, and would cancel Mr. Stein's employment contract effective May 1, 2001,
in consequence of Mr. Stein's failure to secure financing for the Company in the
amount of at least $200,000, all as provided in the Amendment.  The Stein Letter
Agreement provides that, instead of


                                       27
<PAGE>


receiving a one-time payment of $20,000 upon cancellation of Mr. Stein's
employment contract as provided in the Amendment, Mr. Stein shall instead
receive $2,000 per month for ten months, commencing June 1, 2001. Further, the
Stein Letter Agreement provides that, if Mr. Stein is able to arrange financing
for the Company in the future, the Company will grant Mr. Stein an option to
purchase a number of shares, up to 400,000, based on the contemplated financing
target of $200,000 (i.e., if Mr. Stein raises $100,000, then the Company will
grant 200,000 shares under option). Mr. Stein also acknowledged in the Stein
Letter Agreement that, as of May 1, 2001, he relinquished his titles of Chairman
of the Board and Chief Executive Officer of the Company, and became Vice
Chairman of the Board.








                                       28
<PAGE>


                           PART II -OTHER INFORMATION


Item 1.  Legal Proceedings

     Reference  is made to the  Company's  Annual  Report on Form 10-KSB for the
year ended  December 31, 2000,  for a discussion  of an action filed by Mr. Real
Morel against the Company in the Supreme Court of British Columbia, Canada.


Item 2.  Changes in Securities


     During  the  first six  months of 2001,  the  Company  undertook  a private
placement offering of units (the "Units") to Accredited  Investors (as such term
is defined in Rule 501 of Regulation D under the Securities  Act of 1933).  Each
Unit  consisted  of one (1)  share of the  Company's  common  stock  and one (1)
warrant,  exercisable  for one year from the agreement date, to purchase one (1)
additional  share of the Company's common stock at a price of $0.75. The Company
sold each Unit for $.20 per Unit. The Company realized proceeds of $200,000 from
the sale of Units under this offering. The Company completed this transaction in
June 2001,  with the proceeds  from the offering to be used to pay for operating
costs and provide working capital. Because of a possible technical defect in the
offering,  the  Company  offered  the  participants  the right to rescind  their
subscriptions  in the offering and to  participate  in a subsequent  offering in
which the  possibility of a defect was eliminated.  The subsequent  offering was
made upon the same terms as the original  offering with the exceptions  that the
exercise  price was  changed  to $0.50 per  share  from  $0.75 per share and the
purchase warrant was extended to two (2) years as consideration for any possible
inconvenience  experienced by the  subscribers.  All participants in the initial
offering  accepted  the  Company's  rescission  offer with  respect to the Units
subscribed for in the initial offering.

     Additionally,  the Company is currently undertaking a new private placement
of units  consisting of a promissory  note that bears  interest at a rate of 15%
per annum and a warrant to  purchase  three (3) shares of the  Company's  common
stock,  at an exercise price of $0.195 per share,  exercisable for two (2) years
from the date of  subscription.  To date,  the  Company  has raised One  Hundred
Thousand Dollars ($100,000) in this offering.


Item 3.  Defaults Upon Senior Securities

         None


                                       29
<PAGE>


Item 4.  Submission of Matters to a Vote of Security Holders

         None


Item 5.  Other Information

         None


Item 6.  Exhibits and Reports on Form 8-K

         (a)   Exhibits


         3.1   Company's Articles of Incorporation, as amended October 12, 1999
               (incorporated herein by reference to Exhibit 3.1 to the Company's
               Annual Report on Form 10-KSB for the year ended December 31,
               1999, filed with the Commission on April 7, 2000).

         3.2   Company's By-laws as amended and restated December 11, 2000
               (incorporated herein by reference to Exhibit 3.2 to the Company's
               Annual Report on Form 10-KSB for the year ended December 31,
               2000, filed with the Commission on April 16, 2001).

         10.1  Agreement and Plan of Merger, dated as of December 1, 2000 by and
               among the Company, Electroship Acquisition Corp., Electroship
               (N.Y.) Inc., Electroship Partners, John Gremmo, John A.
               Notarianni, Leo J. Mangan, Raymond Anthony Joao and Richard
               Reichler (incorporated herein by reference to Exhibit (c) 1. to
               the Company's Report on Form 8-K, filed with the Commission on
               January 3, 2001).

         10.2  Assignment of Patent Application from Electroship Partners to
               Electroship (N.Y.) Inc. and Defined Field of Use License
               Agreement between Electroship Partners and Electroship (N.Y.)
               Inc. dated as of September 20, 2000 (incorporated herein by
               reference to Exhibit (c) 2. to the Company's Report on Form 8-K,
               filed with the Commission on January 3, 2001).

         10.3  License Agreement between Envirokare Composite Corp. and
               Thermoplastic Composite Designs, Inc. dated March 30, 2001
               (incorporated herein by reference to Exhibit 10.3 to the
               Company's Annual Report on Form 10-KSB for the year ended
               December 31, 2000, filed with the Commission on April 16, 2001).

          10.4 Merger Agreement by and among the Company, Envirokare Composite
               Corp., Thermoplastic Composite Designs, Inc., Dale Polk, Sr. and
               Dale Polk, Jr., dated March 30, 2001 (incorporated herein by
               reference to Exhibit 10.4 to the Company's Annual Report on Form
               10-KSB for the year ended December 31, 2000, filed with the
               Commission on April 16, 2001).



                                       30
<PAGE>



         10.5  Employment Agreement between the Company and Charles H. Stein,
               dated December 18, 2000 (incorporated herein by reference to
               Exhibit 10.5 to the Company's Quarterly Report on Form 10-QSB for
               the period ended March 31, 2001, filed with the Commission on
               June 15, 2001).

         10.6  Employment Agreement between the Company and Mark L. Kallan,
               dated December 18, 2000 (incorporated herein by reference to
               Exhibit 10.6 to the Company's Quarterly Report on Form 10-QSB for
               the period ended March 31, 2001, filed with the Commission on
               June 15, 2001).

         10.7  Employment Agreement between the Company and Gerald Breslauer,
               dated December 18, 2000 (incorporated herein by reference to
               Exhibit 10.7 to the Company's Quarterly Report on Form 10-QSB for
               the period ended March 31, 2001, filed with the Commission on
               June 15, 2001).

         10.8  Amendment to Employment Agreements between the Company and each
               of Charles H. Stein, Mark L. Kallan and Gerald Breslauer, dated
               March 14, 2001 (incorporated herein by reference to Exhibit 10.8
               to the Company's Quarterly Report on Form 10-QSB for the period
               ended March 31, 2001, filed with the Commission on June 15,
               2001).


         10.9  Letter Agreement between the Company and Charles H. Stein, dated
               May 8, 2001 (incorporated herein by reference to Exhibit 10.9 to
               the Company's Quarterly Report on Form 10-QSB for the period
               ended March 31, 2001, filed with the Commission on June 15,
               2001).

         (b)   Reports on Form 8-K

                  None


                                       31
<PAGE>


                                    SIGNATURE


     In accordance  with Section 13 or 15(d) of the Exchange Act, the Registrant
has caused this report to be signed on its behalf by the undersigned,  thereunto
duly authorized, on July 31, 2001.


                              ENVIROKARE TECH, INC.
                              Registrant



                              By:   /s/ STEVE PAPPAS
                                   --------------------------------------
                                   Name:  Steve Pappas
                                   Title: President
                                          (Principal Executive Officer and
                                          Principal Financial and Accounting
                                          Officer)






                                       32